This popular post was originally published April 5, 2011.

Joseph Stiglitz is a left leaning, big government, 68-year-old Nobel Prize winning economist with a life long sinecure at the magnificently wealthy Columbia University. His recent essay in Vanity Fair, “Of the 1%, By the 1% and For the 1%“, is an incoherent mish-mash of boring class politics. In a winding series of bizarre conflations and assertions (for example, Iran and Russia have economic equality equivalent to America) he concludes that if only we could make the “top 1%” less wealthy, we would have a better society. Most important, we could finally leave the really important decisions to Government Technocrats, who shockingly happen to come from places like the aforementioned magnificently wealthy Columbia University.

My initial reaction to the essay was my usual sense of mental numbness when the Left talks about economic inequality. Similar essays have been written by hundreds of lesser mortals than Stiglitz over the decades and all have the same predetermined conclusion. The argument goes something like this: “Everyone in the country is economically worse off, or barely better off, than 10 years ago (or 20 or 30 years ago) except for the ‘top 1%’ (or 5%, or 10% etc.) because of Republican Party policies.” The solution is more  government involvement in the economy. Economic statistics about growing disparities among “quintiles” and “percentiles,” which are always misunderstood, are trotted out as proofs. The policy prescriptions always include higher tax rates “for the wealthy” and more “government investment” in education, technology, health care, etc., etc. While few actually call for the execution of the “top 1%,” Stiglitz does darkly warn that throughout history the “top 1%” often learn ‘too late’ that their fate is bound up with the other “99%.” I wonder what percentile Stiglitz is in? My guess is he makes the cut at the “top 5%,” thus still safe from the hordes.

My second reaction was to laugh out loud. I realized I was reading this essay, not in Mother Jones or The Nation, but in Vanity Fair. Vanity Fair is a gossip and culture magazine of the rich, by the rich and for the rich. It is owned by Conde Nast, in turn which is owned by S.I. Newhouse, listed by Forbes as the 130-something richest guy in the world. Further, its readership is among the wealthiest in all of magazinedom. According to Media Max, the magazine brags to advertisers that the median income of its mostly female readers (about 80%) is $160,000 and a relatively youthful 41 years old. One wonders how much Stiglitz demanded to be paid for his essay. My guess is he would have gladly paid to have the essay printed for the all the high society attention it garners. Then again, maybe he was just trying to warn his readership to surrender before the Bastille is stormed.

My third reaction was to realize this essay was one of the most absurd of its kind. It set new standards for distortion of facts to reach a basic “government knows better” conclusion. If that is what Stiglitz thinks, then he should just say it. But distorting economic statistics to demonstrate one’s point is manipulative and worse than the supposed sins of the “top 1%.” As Thomas Sowell points out in his recent book Intellectuals and Society, economic inequality obsessives, like Stiglitz, almost always resort to the old trick of “confusing statistical categories with flesh-and-blood human beings.” These economic categories are usually divided into “percentiles”; for example, from the “top 20% to the bottom 20%.” The categories are also almost always defined in terms of “households” rather than individuals. The presumption in these kinds of essays is that real humans are stuck in one or the other percentile, as if predetermined by fate, and that household size is immutable through time.

Joseph Stiglitz is a left leaning, big government, 68-year-old Nobel Prize winning economist with a life long sinecure at the magnificently wealthy Columbia University. His recent essay in Vanity Fair, “Of the 1%, By the 1% and For the 1%“, is an incoherent mish-mash of boring class politics. In a winding series of bizarre conflations and assertions (for example, Iran and Russia have economic equality equivalent to America) he concludes that if only we could make the “top 1%” less wealthy, we would have a better society. Most important, we could finally leave the really important decisions to Government Technocrats, who shockingly happen to come from places like the aforementioned magnificently wealthy Columbia University.

My initial reaction to the essay was my usual sense of mental numbness when the Left talks about economic inequality. Similar essays have been written by hundreds of lesser mortals than Stiglitz over the decades and all have the same predetermined conclusion. The argument goes something like this: “Everyone in the country is economically worse off, or barely better off, than 10 years ago (or 20 or 30 years ago) except for the ‘top 1%’ (or 5%, or 10% etc.) because of Republican Party policies.” The solution is more  government involvement in the economy. Economic statistics about growing disparities among “quintiles” and “percentiles,” which are always misunderstood, are trotted out as proofs. The policy prescriptions always include higher tax rates “for the wealthy” and more “government investment” in education, technology, health care, etc., etc. While few actually call for the execution of the “top 1%,” Stiglitz does darkly warn that throughout history the “top 1%” often learn ‘too late’ that their fate is bound up with the other “99%.” I wonder what percentile Stiglitz is in? My guess is he makes the cut at the “top 5%,” thus still safe from the hordes.

My second reaction was to laugh out loud. I realized I was reading this essay, not in Mother Jones or The Nation, but in Vanity Fair. Vanity Fair is a gossip and culture magazine of the rich, by the rich and for the rich. It is owned by Conde Nast, in turn which is owned by S.I. Newhouse, listed by Forbes as the 130-something richest guy in the world. Further, its readership is among the wealthiest in all of magazinedom. According to Media Max, the magazine brags to advertisers that the median income of its mostly female readers (about 80%) is $160,000 and a relatively youthful 41 years old. One wonders how much Stiglitz demanded to be paid for his essay. My guess is he would have gladly paid to have the essay printed for the all the high society attention it garners. Then again, maybe he was just trying to warn his readership to surrender before the Bastille is stormed.

My third reaction was to realize this essay was one of the most absurd of its kind. It set new standards for distortion of facts to reach a basic “government knows better” conclusion. If that is what Stiglitz thinks, then he should just say it. But distorting economic statistics to demonstrate one’s point is manipulative and worse than the supposed sins of the “top 1%.” As Thomas Sowell points out in his recent book Intellectuals and Society, economic inequality obsessives, like Stiglitz, almost always resort to the old trick of “confusing statistical categories with flesh-and-blood human beings.” These economic categories are usually divided into “percentiles”; for example, from the “top 20% to the bottom 20%.” The categories are also almost always defined in terms of “households” rather than individuals. The presumption in these kinds of essays is that real humans are stuck in one or the other percentile, as if predetermined by fate, and that household size is immutable through time.

This popular post was originally published on Monday, December 13.

One way or the other, Sarah Palin will have the biggest impact on the GOP’s chances to win the presidency  in 2012. Her recent editorial in the Wall Street Journal supporting Rep. Paul Ryan’s economic deficit reduction and economic growth plan is simply her latest in a series of comments on the important issues for America. Her astuteness in these matters is apparent. No, I don’t care if she actually writes these, although there is no reason to believe she does not. Whether she does or not, it is apparent she understands their importance and meaning.    

The two areas where the Federal Government can do the most damage domestically are: 1) the fiscal issues of tax and spending policy, i.e., too much of both; and, 2) regulatory nihilism—-in particular relating to the ad hoc restriction of property rights unilaterally by the executive branch. This happens when the Government implements and interprets vaguely written laws with “unintended” consequences. Examples include the recent Chrysler and GM bailouts, unfunded mandates of all kinds; defining CO2 as a pollutant; the already unchecked power of the EPA overall; and the upcoming Big Kahuna, “Obamacare”.

Ryan’s proposal, A Roadmap for America’s Future, addresses the first issue most directly and parts of the second issue indirectly (for example, his proposals to change Obamacare). I think his plan is a good plan. It is good primarily because it exists at all. If it were up to me the plan would be more simple. About 2/3rds of the forward federal budget are entitlements. Basically, the way our entitlement system works is as follows. It taxes 1 dollar from one group of people and promises 2 dollars to another group of people. All of us are in both groups, although at different times in our lives and for different forms of entitlements.

This is not hyperbole, just a simple statement of what the Government does in fact. The ratio of 1 to 2 may be different, but you get the point. What does this mean? It means as a nation we are less wealthy than our official balance sheet says we are. Think of your own assets and liabilities. If you are like me there is one liability you ignore, the debt of the federal (and state) government, which can only be paid with your taxes, (which is what politics is about, i.e., “who gets and who pays?”). On average, a family of four owes about $140,000 using the most favorable accounting in federal debt. It is really a multiple of that when one factors in the growth path of entitlements, as they are growing far faster than our economy can support.

Any individual today can go on the Social Security website and it will actually show you your personal social security account as if it were a brokerage statement. But unlike a brokerage statement, there are no assets—just a promise to pay. What they will not show you are your personal liabilities owed to the government, because we pretend individuals don’t owe it. If it were there honestly, you would find you owe more money than you will receive, if we had actual transparency. Our entitlement system is not a mere transfer payment system, which by comparison would be almost harmless; it is a true Ponzi scheme, and therefore not sustainable. All economists know this of course. I honestly believe most politicians really do not understand this.

Ryan’s proposal at least transparently addresses the problem of entitlements for all to see. Yet it sits out there in no man’s land within the GOP, with no visible alternative in sight. Entitlements are called the third rail in politics for a reason. I believe the reason the GOP fears this issue, as all past politicians have, is there is genuine concern that the so called tea party movement, which put the GOP back in power, is not really the vanguard of a fiscal restoration movement. Rather, they fear it is a more traditional “don’t gourd my Ox” movement. Maybe it is; if so then we really are at the beginning of the end for the American Empire.

Next: What does it mean that Palin is the first 2012 hopeful to endorse a specific plan?

One way or the other, Sarah Palin will have the biggest impact on the GOP’s chances to win the presidency  in 2012. Her recent editorial in the Wall Street Journal supporting Rep. Paul Ryan’s economic deficit reduction and economic growth plan is simply her latest in a series of comments on the important issues for America. Her astuteness in these matters is apparent. No, I don’t care if she actually writes these, although there is no reason to believe she does not. Whether she does or not, it is apparent she understands their importance and meaning.    

The two areas where the Federal Government can do the most damage domestically are: 1) the fiscal issues of tax and spending policy, i.e., too much of both; and, 2) regulatory nihilism—-in particular relating to the ad hoc restriction of property rights unilaterally by the executive branch. This happens when the Government implements and interprets vaguely written laws with “unintended” consequences. Examples include the recent Chrysler and GM bailouts, unfunded mandates of all kinds; defining CO2 as a pollutant; the already unchecked power of the EPA overall; and the upcoming Big Kahuna, “Obamacare”.

Ryan’s proposal, A Roadmap for America’s Future, addresses the first issue most directly and parts of the second issue indirectly (for example, his proposals to change Obamacare). I think his plan is a good plan. It is good primarily because it exists at all. If it were up to me the plan would be more simple. About 2/3rds of the forward federal budget are entitlements. Basically, the way our entitlement system works is as follows. It taxes 1 dollar from one group of people and promises 2 dollars to another group of people. All of us are in both groups, although at different times in our lives and for different forms of entitlements.

This is not hyperbole, just a simple statement of what the Government does in fact. The ratio of 1 to 2 may be different, but you get the point. What does this mean? It means as a nation we are less wealthy than our official balance sheet says we are. Think of your own assets and liabilities. If you are like me there is one liability you ignore, the debt of the federal (and state) government, which can only be paid with your taxes, (which is what politics is about, i.e., “who gets and who pays?”). On average, a family of four owes about $140,000 using the most favorable accounting in federal debt. It is really a multiple of that when one factors in the growth path of entitlements, as they are growing far faster than our economy can support.

Any individual today can go on the Social Security website and it will actually show you your personal social security account as if it were a brokerage statement. But unlike a brokerage statement, there are no assets—just a promise to pay. What they will not show you are your personal liabilities owed to the government, because we pretend individuals don’t owe it. If it were there honestly, you would find you owe more money than you will receive, if we had actual transparency. Our entitlement system is not a mere transfer payment system, which by comparison would be almost harmless; it is a true Ponzi scheme, and therefore not sustainable. All economists know this of course. I honestly believe most politicians really do not understand this.

Ryan’s proposal at least transparently addresses the problem of entitlements for all to see. Yet it sits out there in no man’s land within the GOP, with no visible alternative in sight. Entitlements are called the third rail in politics for a reason. I believe the reason the GOP fears this issue, as all past politicians have, is there is genuine concern that the so called tea party movement, which put the GOP back in power, is not really the vanguard of a fiscal restoration movement. Rather, they fear it is a more traditional “don’t gourd my Ox” movement. Maybe it is; if so then we really are at the beginning of the end for the American Empire.

Next: What does it mean that Palin is the first 2012 hopeful to endorse a specific plan?

The photo above depicts Warren Buffett and Bill Gates at a bridge event in Omaha, Nebraska in 2006.

An updated version of the first blog I ever wrote (July 3, 2006)

Warren Buffet was back on television last weekend telling ABC News how the rich don’t pay their fair share of taxes. One would suppose that just the very fact of that statement, coming from a man worth $50 billion or so, who pays and has paid virtually no taxes, is 78 years old, and whose estate also will never pay taxes would be self evidently ridiculous. For some reason it is not. He apparently agrees with Obama’s definition of the rich as a married couple making $250,000 (in New Jersey for example) whose marginal income tax rate is over 50%. Let me explain the nature of Buffet’s tax advantages.

He is a major shareholder of Berkshire Hathaway. Berkshire Hathaway is simply a publicly traded company called a holding company that owns a portfolio of parts or all of other companies. For example, it might own 5% of Coca Cola and 100% of a furniture company. Berkshire Hathaway and Buffet’s style of investing is as a long term investor. Relative to other portfolio managers and the overall market he is far less diversified. He is really a hedge fund manager who uses a publicly traded company as the vehicle. Despite his views about taxation, his 55 year track record has outperformed the overall market by a large margin. There is some probability this is just luck, but it is a very low probability.  Given the length of his track record and the magnitude of his risk-adjusted out performance, it is likely his results are not merely luck. I for one have no problem with his earned wealth.  (I am ignoring for purposes of brevity his constant lobbying for policies which favor his investments. These are many and worthy of another essay which includes all Rent Seeking Enterprises: (The Concise Encyclopedia of Economics | Library).

But one should have a problem with his tax views. Most of his income comes from unrealized capital gains, so he pays no taxes. He pays himself a small salary. Most people who invest, first pay taxes on income and then invest. He does not. He initially invested successfully with other people’s money and has effectively been able to grow his wealth virtually tax free through his percentage ownership of the publicly traded Berkshire Hathaway. But why does he want to prohibit others from the opportunity of earning tax free compounded wealth?  His philosophy on taxation may be divined from a quote in a May 1977 article in Fortune Magazine.

“A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention”.

So does Buffett believe he was really lucky due to his random cosmic receipt of superior investing powers? This statement above is “communist manifesto light” (“from each according to his abilities and to each according to his needs”). If the government is such a moral allocator of wealth, why does he not contribute, say, 40% a year of his annual increase in wealth to the Feds? If it’s good for people making $250k to do it, how much better must it be for those worth $40 billion?

His deterministic philosophy has not prevented him from maximizing total control of his own wealth. Worse, this implied deterministic attack on existential freedom (is it really just the right “vocal chords” which makes one a singing star?) seems to be something that excludes himself. Who should decide from whom and to whom one is to “divert” these portions of national income? Well, people like Warren Buffet, of course, whose legacy foundation (with Gates) will never surrender its economic freedom. Surrendering freedom is for dopey “hardworking citizens lacking jackpot-producing talents” but make more than $250K a year. He views himself a philosopher king. Like so many people with great talent in one field he believes this talent translates to other fields. But Buffett is a philosophical naif and a borderline moral ghoul. One of his great “charitable causes” is global birth control, an activity perfect for persons who feel comfortable making choices for others.

When Napolitano was asked by reporters Monday “will you insist that {women wearing hijabs} go through full body pat downs?” she responded not with a “yes,” but said “with regard to that specific issue there will be more to come…..we are doing this to keep powders, liquids, and gels off the planes.” That really is all you need to know about Obama’s TSA. But for extra credit, I include the following.

Every time a shoe, underwear, a box cutter or whatever is used once in an attempted terrorist attack by a foreign Muslim, a specific prohibition on all Americans is enacted. For air travelers it is akin to the proverbial frog being slowly boiled to death. Ann Coulter is exactly correct—-the final step will be explicit cavity searches. There are approximately 50,000 commercial air flights a day worldwide. That is 18 million flights a year or about 1.5 billion travelers a year. It is interesting that whatever policy was in place at the time of the several post 9/11 attacks (shoe bomber guy, Detroit underwear guy—-probably others) they were unable to detect the “man caused disaster doer” in advance of boarding the plane. Yet each time he was foiled. The policies put in place early on in 2002, combined with passenger and crew awareness, have been very effective, despite these few exceptions among close to 200 million flights globally. Napolitano, who clearly is utterly clueless and not making any of these decisions, is a sight to behold. Despite these newer TSA prison search policies, there will still be some future Richard Reid. How much more effective can we reasonably be?

The most successful preventions have come well before people have even entered airports. This is because resources are actually focused on high probability targets instead of our one size fits all body searches. The probability of a terrorist attack by plane was and still remains remote. Passengers also will never again be surprised and unresponsive. I would like to see the statistics of actual would be terrorists caught just prior to boarding a plane. I do not recall ever hearing of any, but there must have been some, right? The TSA does perform checks on its screeners. USA Today reported in 2007 that 75% of TSA plants made it through the screeners. But we still have few incidents. We all are willing to endure slowdowns etc., to improve safety. But the spectacle now being imposed has become degrading and humiliating to us as individuals and as a nation. It is humiliating because what we are doing is transparently stupid and extreme.

If you disagree, why aren’t we demanding all cars be searched at rush hour on all bridges and tunnels in America? Or, why isn’t every package carried by an individual walking on a city bridge not checked for explosives or machine guns? Or why aren’t every person on crutches checked to see if their crutches can be converted to sniper rifles (Day of the Jackal).

Vivian Schiller, CEO of NPR, has one of the best jobs in the world. Illustration by Riccardo Vecchio

At first I thought this was a joke—”Juan Williams firing may be violation of Foreign Agents Act “. The lobbyist group, The Center for Security Policy, has suggested CAIR (The Council on American Islamic Relations) was responsible for Williams’ firing. To the extent they are major contributors to NPR or its parent, The Corporation for Public Broadcasting, this is plausible. While CAIR was highly vocal in criticizing Williams for putative anti-Muslim comments, this is what they do. They have an outrage a day.

But I don’t think that was why he was fired. I believe NPR president Vivian Schiller was clearly operating on implied or understood orders; but from who? I may be watching to much Fox programming (for example, its hit show, “Lie to Me”) but her comments were a series of non-sequiturs.  Her meta-reason for firing Williams was for “expressing opinions not analysis” on Fox News. If that were not absurd enough, she told reporter Rodney Ho this was not an isolated incident for Williams. In fact, there have been repeated cases of Williams being warned about “expressing opinions not analysis” and as such, this was not a case of “one strike and you are out”.

When pressed by Ho to name other incidents, Schiller came up with this quote; “he famously said “something” last year about Michelle Obama and Stokely Carmichael”. Does anyone under 50 actually remember Stokely Carmichael? He was most identified with black separatist politics in the 1960s. What was that “something he famously said”?

In what must be the most humorous and psychologically astute line ever uttered by the usually bland but pleasant Williams, he said (soon after the inauguration) “the First Lady has this Stokely Carmichael in a designer dress thing going”. Williams was referring to her faux militancy and oft-repeated assertions about America’s moral weakness. He also implied that Michelle would eventually hurt Obama’s popularity (her entourage vacation to Spain makes Williams seem prescient).

Apparently this was an outrage over in NPR land. And why not? They receive about 2-3% of their budget from its government supported parent, which on the margin is meaningful. They must have feared the wrath of Michelle back in 2009. NPR’s ”ombudsmen” in 2009 called Williams a “lightning rod” of controversy. This comes as a bizarre comment for Fox News fans—[Here's NPR's ombudsman's piece on him last year after the Michelle Obama comment.]

Ten years at NPR and the only “opinion not analysis” they could identify were Williams’ Muslim and Michelle Obama comments?  Schiller was clearly obeying orders, but not from CAIR or Soros (who did contribute $1.8 million this month to NPR). Williams has been on the target list for some time.

I believe it was Michelle Obama who ordered the hit. But Ms. Schiller’s clumsy firing was surely not appreciated at the White House as she implicitly linked Michelle with the firing of Juan Williams. Not cool. In fact, Schiller has just been written up by the NPR Ombudsmen.— NPR’s Firing of Juan Williams Was Poorly Handled : NPR Ombudsman : NPR. The countdown for Ms. Schiller begins.

Lame, limp and self absorbed attention seeking is not what most of us are looking for this year in our politicians. That’s what the Democrat Party is for. But Republican House members, Congressmen Eric Cantor, Paul Ryan, and Kevin McCarthy have released a new book entitled Young Guns, featuring themselves on the cover, apparently designed to magnetically attract us to the Conservative cause. Rich Lowry of National Review has added a second tag line in an essay yesterday, calling the trio “chastened rebels”. The Weekly Standard claimed credit last week for the “Young Gun” moniker as they were referred to as such in a 2007 issue. Have people lost their minds? Normal people cannot possibly find this appealing.  Is one supposed to imagine a trio of mythic, heroic Roland Deschain Gunslingers, (from the Stephen King Dark Tower series), striding into town to take on the High Princess of Evil, Nancy Pelosi?  Maybe they envision someday having this cover photo replacing Che Guevara as the college dorm poster of choice for future rebellious youth.

If this book promotion were not bad enough, the GOP has also released a short video trailer, which could easily be used unedited as an SNL bit, if the average American knew who these guys were. Radio talk show host John Batchelor summarized it best (Attack of the Zombie Republicans) when he states that the YouTube video sets the standard for “suicidal vanity”. He observes mockingly that they look like “West Hollywood valets {who} gaze longingly at each other…….as a script from Frank Capra outtakes {plays} in the background”. Viewers should also take note of the Washington Monument photo taken from its base. I thought that sort of “subliminal” imagery went out with drive-in movies. Our erstwhile gunslingers are hard and virulent and presumably here to save us from tyranny.

The problem, besides the obvious clownishness of the imagery, is they have the storyline backwards. They are following the people, not leading. How inspiring is it when they say, according to the schoolgirlish Lowry, “we want to make sure we don’t screw this thing up again”? Can it get much worse than that? The only reason the GOP may get a second chance to rule the House is because the Democrats are even worse. No one in their right mind is following “young guns” or “chastened rebels”. Not only is the imagery absurd, but the facts are contradicting the premise.  Ryan and Cantor have been in the House for 12 and 10 years, respectively. McCarthy has been in the House only since 2006, but was effectively appointed by his predecessor of 28 years, and former boss, Bill Thomas—-the Chairman of the House and Ways Committee pre 2007.

Who are these guys kidding? Congress has a 70% disapproval rating. The more we see of them in this context, the more worrisome is our country’s condition. Here is some friendly advice to our 3 amigos and the GOP Congressional leadership promoting this. Don’t insult your boss (“we the people”) with your exhibitionist, effeminate and embarrassing preening. It will just make us madder. If we vote for you, it is because we have no other choice. We want you to do your job without this farcical glibness. In fact, here is one time our president can give you some sound advice: “just plug the damn hole.”

The countless articles and commentaries about the proposed Mosque near Ground Zero never fail to include the proviso “no one disputes their constitutional right to build it……….”. From the always odious Keith Olbermann to the always entertaining Ann Coulter it is de rigueur to make this point when discussing the proposed Mosque. Why we need to constantly reference this point is beyond me. Our original constitutional right to dispose of our property at will is derived from the Fifth Amendments Takings Clause. But as all property owners in America are aware, our rights to do what we want with our property has long been superseded by local zoning boards, the EPA, local historical committees, farm usage regulations, and countless other restrictive powers of Local, State and Federal Government. Plus the Supreme Court ruling in Kelo versus the City of New London expanded the concept of eminent domain to include taking property from one group of private citizens to give to another group of private citizens.

While I deplore this development almost universally, it is not the case that, de facto, there is a constitutional right to build the Mosque near ground zero. It is merely the case that the Bloomberg Administration’s Zoning Commission decided to approve it. If you doubt this, I suggest you try to convert where you now live into a Church.

I am not in the real estate business. But I own a house and an apartment. At various other times I have either owned or considered buying properties. In not one of my personal situations was I not interfered with by some entity of government to prevent me from doing something I wanted to do on any property I owned or wanted to own. It is useful to point out a few items to prove just how limited our property rights truly are. My point is to show that indeed, the Mosque Builders were granted explicit permission to build, but they have no “right” to build. My examples are all trivial (except perhaps one), which is precisely my point.

I wanted to build my current driveway 10 feet to the right of where it is now on my 5 acre lot. My then “neighbor” objected as I apparently violated some “100 foot rule”. When I built my house I wanted slightly higher ceilings. I was prevented because I would have violated a height rule. I have 80 foot trees surrounding my house and have by far the smallest property in my “neighborhood”.

I bought a sofa for my apartment in NYC. It is just a sofa, but apparently on the slightly large size. It could not fit into the very small elevator of the apartment building. There are enormous windows in the building and the “super” suggested we could easily have it lifted it through the 3rd floor window of the vacant apartment across the hall from ours. We were prevented by the city because our’s is a “landmark” block (off 3rd Ave!) and we might have “risked” some damage.

It is hard to believe it has been only 19 months since the president’s inauguration. But in “political time” it has been much longer. When a president seeks “fundamental change”, and actually means it, political time expands as he attempts to break through decades of built up political boundaries. Remember how Obama bragged he accomplished health care reform when every president since Teddy Roosevelt failed? Putting aside the absurdity of the statement itself, it demonstrates that our president thinks in terms of centuries, not mere 4 year election cycles.

The electorate has already lost faith in his vague and mindless rhetoric and now is beginning to get irritated. Voters prefer more mundane objectives, like increased opportunities for a job. And they are not too hung up on whether they are “green” or not. His stimulus predictions failed; his health care bill was and is opposed by strong majorities; projected deficits are at record levels by any measure; and unemployment won’t decline. Yet he continues to speak the language of the losing gambler, by doubling down on policies which have not worked. The next act in his bag of tricks is to hike taxes.

Although he tried to subtly sneak in the message during his Oval Office speech, no amount of blaming Bush for the financial crisis or the cost of the Iraq war will cut it. He re-hired Bush’s Secretary of Defense, his Fed Chairman, and his Treasury Secretary’s top partner after Bernanke, Tim Geithner. He oversold the crisis and then oversold the solution in order to “fundamentally change” America—-which in turn helped advance the crisis. Without getting too much into the “oversold the crisis” concept, it is helpful to note that all of the top 10 banks (except Citicorp) were profitable in 2008, the year of the crisis. Profits increased substantially since then. The Fed, which purchased many assets from these banks, has also been “profitable”. The “bailouts” themselves were overstated and unneeded—-but that is another story for another day.

In the wake of the successful Tea Party rally in DC, small(er) government proponents can be forgiven for a sense of heightened optimism about the future. While the Glenn Beck rally was light on politics, its audience knew why they were there. But halting, let alone reversing, the massive federal and state bureaucracies will require enormous and persistent political will by the populace. Is there enough consistency of opinion within this nation to slow the growth of government? Let’s hope we get the opportunity to find out. But it’s usually the other guy’s handout we want to abolish, not our own.

It is easy and correct to critique the performance of Obama and his cohorts in Congress. They have extended the relative size of government as well as its regulatory reach beyond any of their predecessors since FDR. These have combined to create a virtual Rubik’s Cube maze which business, especially small business, will be compelled to navigate. This diminishes wealth for all in the name of fairness for all. Obama’s Rasputin, Rahm Emanuel, was tactically accurate when he said “you never want a serious crisis to go to waste”, particularly when it was so easy, in the public’s eye at least, to pin the crisis on Bush and Company.

The good news is they only succeeded in passing 2 out of 3 of their primary initiatives (Stimulus, ObamaCare, but not Cap and Trade), even if public opinion caught up with the ruse before the health care bill passed.  As “President” Jack Nicholson once said in the prescient movie parody of the current administration, Mars Attacks, “that’s {still} 2 out of 3, and that ain’t bad”. Obama’s budget spending is north of 25% of GDP, the highest since WW II. Those who believe the government is as efficient as the private sector (“justice” adjusted), may think this is not a problem. But an increasing amount of people correctly recognize its dangers.

While the Obamacrats have raised the bar of fiscal irresponsibility to all time highs by any measure, (with the assistance of the Bush Administration in the Fall of 2008), the history of the Republican Party in slowing or limiting government’s growth is not better than the Democrats. I think it is helpful to read that sentence again. Henry Kissinger’s great line about University politics (“the politics are so vicious because the stakes are so small”) is unfortunately applicable to national politics. The differences of opinion are really around the margins, at least as it relates to outcomes if not ideology. Federal expenditures as a percent of GDP have been as likely to be as high under Republican administrations as Democrat.

In an idealized world, citizens disagree about political policy for one of three reasons; 1) core moral principles; 2) differences of opinion about utilitarian/practical outcomes relative to alternative policies; and, 3) the self interest of various constituencies, usually using one of the two other reasons as rationales. Sometimes all 3 reasons can be in agreement or stark disagreement. For example, what if we could harvest body parts from convicted serial murderers to save the life of multiple children in need of transplants? (This was the theme of the television show “The Closer” this week). Closer to political reality perhaps, what if we could harvest “stem cells” from unborn children to save the lives of the “born”? Or, what if Steve Jobs’ self interested insatiable desire to be the global gadget king creates a secure life for millions of employees and vendors without taking away their liberty?

In matters of economics, it is reasonable to believe all 3 of these reasons can generally be in harmony. This was assumed by our founding fathers to be possible under the right set of constitutional principles and laws. The moral principal of individual freedom, the “selfish” pursuit of life, liberty and happiness, and the Adam Smith derived belief that competition by the many produce better utilitarian results than planned actions by the few, were all taken for granted by our founders. There were no Marxists or Socialists in their time, but there was Mercantilism, anti-free trade and government supported monopolists. For reasons known only to Obama, Pelosi and Reid they have rejected our founders’ notion in favor of more central planning.

My fellow New Jersey citizen, Michael Fleischer, a small business owner, details in a highly intuitive WSJ editorial on why business isn’t hiring. Rather than summarize what he wrote, let me provide some evidence that Fleischer’s example is not merely an anecdote but a representative condition as predicted by Christina Romer in her own study. The following facts can be found here on the Small Business Administration website. We have all heard these kinds of statistics before, but it is worth focusing on them again as election time approaches.